Big Trail Running Company Has Started to Produce Running Apparel

question 45

Multiple Choice

Big Trail Running Company has started to produce running apparel in addition to the trail running shoes that they have manufactured for years. They feel that a departmental overhead rate would best reflect their overall manufacturing overhead usage. Based on research the following information was gathered for the upcoming year: Manufacturing overhead is driven by machine hours for the machining department and direct labor hours for the finishing department.
At the end of the year, the following information was gathered related to the production of the trail running shoes and running apparel:
How much manufacturing overhead will be allocated to the trail running shoes? (Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar.)

• A)$482,500
• B)$484,054
• C)$900,000
• D)$225,000

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Definitions:

Supplier

A supplier is an entity or person that provides products or services to another business, often a key component in the supply chain of manufacturing and retail operations.

Operating Expenses

Costs associated with the day-to-day operations of a business, excluding costs of goods sold, such as rent, salaries, and utilities.

Sales Discounts

Price reductions offered by sellers to encourage prompt payment by buyers.

Credit Sales

Sales made by a business where payment is allowed to be deferred until a later date.